Two taxpayers have been successful before the NSW Supreme Court in revoking assessments issued under the Duties Act 1997 (NSW). The matter concerned complex transactions relating to the Cross City Tunnel (Sydney).
The Court heard details of the transactions which involved $692m being paid for units in a property trust and $3.4m being paid for shares in a company. Broadly, the transactions related to the sale of the tunnel and an agreement that ownership of the principal private sector parties would be transferred to a new consortium. These transactions occurred in mid 2007.
CCM Holdings Trust Pty Ltd sought review of the Commissioner’s assessment of duty under the Duties Act of $36m plus penalty tax and interest on a transfer to it of units in the CrossCity Motorways Property Trust (the ‘Units Transfer’). The assessment was made under the land rich provisions as they stood at the time. CCT Motorway Company Nominees Pty Limited sought review of the Commissioner’s assessment of duty of $20,431.20, plus interest, on a transfer to it of shares in CrossCity Motorway Pty Limited (the ‘Shares Transfer’).
The Supreme Court found the Property Trust was land rich at the time of the acquisition. However, the Court held the Units Transfer was exempt under s 163ZB(1)(i) of the Duties Act. It was also satisfied the Shares Transfer was exempt under s 54(3) of the Duties Act. The Court held that the relevant transfers were not part of a scheme for the conferring of interests in relation to the trust property on a new trustee “to the detriment” of the beneficial interest or potential beneficial interest of any person. Accordingly, only id=”mce_marker”0 duty was chargeable in respect of each transfer.
(CCM Holdings Trust Pty Ltd & Anor v Chief Comr of State Revenue [2013] NSWSC 1072, NSW Supreme Court, Bergin CJ in Eq, 9 August 2013.)
[LTN 157, 15/8/13]